BNL and BNP Paribas India

Transcription

1 BNL and BNP Paribas India A unique bridge for trade and investments Bologna April 19 th, 2017 Confindustria Emilia Romagna Maurizio Accinni Senior International Development Manager

2 India snapshot 2

3 India s Economic Profile Overview Overview 1.27 billion people (68% rural) / 22 official languages / 860 dialects (o/w 30 spoken by more than 1 million people). 50% of the population below 25 years old. 65% of the population below 35 years old. 29 states + 7 Union Territories. The world s largest democracy: 815 M eligible voters. 948 M Hindus (78%), 172 M Muslims (14%) Territory of 3,287,590 km2: 11 times the size of Italy. GDP: ~2.1 USD trillion (FY2015) : Equivalent to Italy GDP. Domestic driven economy (Exports = 25% of GDP) Forex Reserves: USD 345 Bn (April 2015). 11 times less than China (USD ~3.7 trillion) 2014 Remittances: USD 70.4 Bn (more than India s USD 65bn software exports). FDI at USD 34.9 Bn (FY2015) (61.6% yoy growth) China attracted USD Bn in 2014 Country Rating by S&P: BBB It took India 60 years to become a 1 trillion economy, it will take India less than a decade to become a 2 trillion economy Hindu growth rate 30% 15% 55% India Historical GDP evolution in USD M 45% 25% 30% Acceleration of GDP since : New economic paradigm 60% 25% 15% Primary Sector Secondary Sector Tertiaty Sector Economy driven by Services: India has not experienced any industrial revolution. 3

4 Indian Banking Industry Overview 4

5 Indian Banking Landscape: A Structural View 27 Public Sector Banks Large network with low cost retail fund base. Thus very competitive in Rupee long term rates Were saddled with NPAs of the past but situation is gradually improving Access to business opportunities offered by Govt owned PSUs (Public Sector Units) & ability to sign large tickets. Improving technology capabilities Gradually implementing core banking solutions Market Share (Local Currency Advances) Private 19% Foreign 5% Public 76% 22 Private Sector Banks Newer banks with larger capital base & technology platforms. Strong mid-market drive & retail offers. Lack diversity in offshore & exotic product offerings Not competitive in International trade offering due to lack of international network No capital constraints, full focus in India & drive for cross-selling full packaged products. Whilst foreign banks have lowest market share of advances & deposits, the segment contributes approx. 30% of the sector's profits 41 Foreign Banks International Network for Trade, DCM, M&A, ECM, Foreign CCY Loan Syndication At the forefront of Product Innovation, Modern Technology & Advanced Service levels - Transaction Banking Strong leverage on global network & brand, and cross sell capabilities. Historically older Banks have successfully partnered various MNC companies entering the Indian markets. Market Share (Local Currency Deposits) Private 18% Foreign 4% Public 78% 5

6 Indian Financial System: Key Regulatory Authorities Finance Ministry Economic Affairs Revenue & Expenditure Banking Capital Markets Insurance RBI SEBI IRDA Commercial Banks NBFCs Financial Institutions Stock Exchange Mutual Funds Investment Banks FIIs Insurance Pension Products RBI : Reserve Bank of India SEBI : Securities & Exchange Board of India IRDA : Insurance Regulatory & Development Authority NBFC: Non Banking Finance Companies FII : Foreign Institutional Investor Implementation of Basel III requirements: A challenge for PSU Banks The Indian banking sector is required to grow its capital base by ~EUR 60 bn to comply with Basel IIIrequirements. The estimated required injection of new Tier 1 Equity capital stands at EUR 22 bn for the sector. Public Sector Banks capture more than 80% of the new capital requirements. The weakening profitability of the Public Sector Banks combined with the annual loan growth is raising their overall capital requirement. RBI has recently postponed the deadline to comply with Basel IIIrequirements by one year to

7 Indian Economy 7

8 A departure from the past; a new beginning (the Make in India factor ) After strong growth during (9% CAGR), India s GDP growth slowed down to 4.5-5% during Global slowdown was a contributor, but India s policy paralysis was also a strong contributor election results changed everything. NDA won 338 seats out of 543, Leading partner BJP alone won 282 seats an absolute majority in the Parliament. After 1984, for the first time a Government can function unhindered by smaller regional parties. Policy decisions, even some unpopular ones, have been implemented : fight against hidden cash / implementation of global GST taxation / opening of new sectors for foreign investments / MAKE IN INDIA UPGRADE OF THE LOCAL INDUSTRIAL SECTORS ecc.

9 Agenda of Modi government Agenda Status Action point Inflation control Ongoing Government increased Kharif, Rabi MSP by 3-4% on average, while UPA-2 raised by c10% during its tenure. Current move will help to control inflation Subsidy Control Ongoing Government has started Direct benefit transfer of LPG subsidy in the bank account and the plan is to transfer all subsidies through DBT. The subsidy savings could be over INR500bn annually on the subsidy bill alone when these payments are routed through bank accounts due to elimination of subsidy leakage Labour Law reforms Yet to be done Like Rajasthan government, where they amended four important labour laws (Factories Act, the Industrial Disputes Act, the Apprenticeship Act and the Contract Labour (Regulation and Abolition) Act), making it easier for companies and employers to hire, train and dismiss workers, and to stiffen the rules for trade union registration GST Under way Constitutional amendment bill tabled in the Lok Sabha during winter session, but needs evolution of consensus. Amendment in Land acquisition law Ongoing Government passed an ordinance with consent clause, social impact assessment and livelihood requirement to be abolished for PPP projects, affordable housing, industrial corridors, rural infrastructure and defence installations Also, ordinance states compensation requirements to be applicable for the remaining 12 central acts, which the land law seeks to subsume Kick-starting the investment cycle Ongoing By faster environmental clearance to infrastructure projects Focus on Make in India and smart city projects should kick-start investment cycle Easing foreign investment policy like FDI in insurance from 26% to 49% (subject to parliamentary approval), Hiking FDI limits in defense (26% to 49%) and railway (100%) Reform in coal and mining sector to solve raw material issue, coal block allocation to private players has started Extra allocation of INR700bn to infrastructure sector in FY16 budget Sources: BNP Paribas

10 BNPP Indian economic forecasts FY 13 FY 14 FY 15E FY16E GDP Agriculture Industry Services CPI Inflation Public consumption Fixed investment Exports Imports 6.0 (8.4) (1.6) 1.5 Budget deficit (% of GDP) (4.9) (4.4) (4.1) (3.9) Current account (USD b) (87.8) (32.4) (17.6) 1.8 Current account (% of GDP) (4.7) (1.7) (0.9) 0.1 Sources: CSO; BNP Paribas estimates CPI is by calendar year

11 Italy India economic relationship Italy is the 5 th largest trading partner for India in the EU and the 12 largest investor in India Bilateral trade has grown 10x from Eur 708 M to Eur 7.1 Bn in the last two decades but still not enough. The states of Tamil Nadu, Maharashtra and Haryana are the top 3 investment locations for German companies in India. Italian exports to India are led by machines and machine tools, metals and metal products Indian exports to Italy comprise chemicals, iron and steel products, garments, leather accessories, general purpose machines Bilateral investments in upswing momentum ( Italian Government led mission in April end ) Sources:Indo-italian chamber of commerce, internet 11

12 BNP Paribas India 12

13 Client Coverage (CORP & INST) BNP Paribas Group in India CIB Investment Solutions Investment Banking (M&A, ECM, DCM) Structured Finance Transaction Banking Fixed Income & Treasury Commodity Derivatives Delhi Wealth Management BNP Paribas Investment Services Pvt Ltd. BP2S Custody Services (F&O Clearing) SBI Life Insurance 74% SBI & 26% BNP Paribas Group (2001) Sundaram BNP Paribas Fund Services 51% Sundaram Business Services & 49% BNPP Securities Services (2009) BNP Paribas Sundaram Global Securities Operations 51% BNPP Securities Services & 49% Sundaram Business Services (2009) Equity Derivatives Ahmedabad Kolkata BNP Paribas Asset Mgt India Pvt Ltd 100% BNPP Investment Partners (2010) BNP Paribas India Holding Pvt. Ltd. 100% BNP Paribas SA (2012) BNP Paribas Securities India Pvt. Ltd. (Institutional Broking) 100% BNP Paribas (2013) BNP Paribas India Solutions 100% BNP Paribas (2005) Mumbai Pune Bangalore Hyderabad Chennai Sundaram BNP Paribas Home Finance 50.1% Sundaram Finance & 49.9% BNP Paribas Group (2007) Retail Banking SREI Equipment Finance 50% SREI Infrastructure & 50% BNP Paribas Lease Group (2007) Branch Operations (year of formation) Joint Ventures (year of formation) ARVAL India (Fleet Mgt) 100% BNP Paribas (2007) Geojit BNP Paribas (Retail Broking) 34% BNP Paribas (2007) 13

14 BNP Paribas Corporate & Investment Banking Franchise in India Dynamic client relationship management model: Access to all the major business groups across sectors Corporate & Investment Banking Financing Transaction Banking Fixed Income & GECD Investment Banking Specialized financing (Structured finance) Energy & Commodity Finance Media Telecom Finance Leverage Finance Acquisition Finance Project Finance Asset Finance Export Finance (ECA) Trade finance Export Finance Import Finance Non Funded Cash management Receivable & Payment Management Liquidity Management Escrow Account Management E Banking Fixed income Flow Foreign Exchange Hedging Solutions Interest Rates & Currency Structured Solutions Global equity & commodity derivatives Equity derivatives Commodity derivatives M&A advisory Asset acquisitions across the globe Privatization Divestitures Equity capital markets Initial & Follow-on Public Offers Share Placement Convertible bonds Structured solutions 14

15 BNP Paribas India Dedicated MNC Coverage Team Dedicated support to MNC Subsidiaries across the following spectrum New Entrants Regulatory guidance and initial set-up advisory Account opening Escrow management and FX conversion for inward capital flow Ongoing Operations Working capital facilities in local currency Trade Finance facilities in local and foreign currency Liquidity and cash management FX hedging Growth & Expansion Term lending (local & foreign) M&A advisory for inbound investments / acquisitions Complete product suite for acquisition of stake in local target custody services + FX + cash escrow 13 member MNC team covering 8 Cities : Mumbai, Delhi, Chennai, Kolkata, Bangalore, Pune, Hyderabad & Hyderabad Client base of 360+ customers and growing Dedicated desks for Italian & other BNPP domestic markets ( France / Belgium / Luxembourg ) Strong INR balance sheet & lending capabilities Very competitive Base Rate Strong Cash Management product capabilities Trade & Supply Chain Funding Solutions Connexis Trade a differentiator, Fixed Income solutions One of the few market makers on options Structured Funding Solutions Capital market solutions covering Non Convertible Debentures (NCD) and Commercial Paper (CP) Corporate Finance Capabilities 15

16 Italian Desk: Bridge between India and Italy Formal set up of an Italian Desk in Mumbai in May 2011 and subsequently moved to Delhi in October 2011 Desk established to evaluate and support Italian companies needs in India through a single window concept To provide local support (both commercial and operational) and advice on local market practices, banking environment and applicable regulations To hand hold companies inbound business into India through a two pronged approach : active marketing to Italian companies by Maurizio Accinni, International Business Development Manager, BNL based in Rome in coordination with Head Italian Desk in Delhi followed by onboarding of the clients by local teams BNL and BNP Paribas India: a unique two way banking bridge between India and Italy Co-operation, co-ordination and integration between BNL and BNP Paribas India are the key value for our clients in trade and bilateral investments 16

17 For information, assistance and support for your business development projects:

18 Disclaimer BNP Paribas is incorporated in France with Limited Liability. Registered Office 16 Boulevard des Italiens, Paris. BNP Paribas is authorised and regulated by the CECEI and AMF in France and is regulated by the FSA for the conduct of business in the UK. BNP Paribas London Branch is registered in England and Wales under No. FC Registered office: 10 Harewood Avenue, London NW1 6AA. Tel: Fax: Information and opinions included in this document are provided to you for information purposes only. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by any BNP Paribas Group Company as to or in relation to the accuracy or completeness or otherwise of the material in this document or as to the reasonableness of any assumption contained herein or any assumption contained herein or any other information made available (whether in writing or orally) to any recipient or interested party (or its advisers). The information and opinions included in this document are subject to change without notice as they are based on BNP Paribas understanding as of the date mentioned or based on BNP Paribas own appraisal of the applicable facts, law and regulations in force at the date hereof. This document is not intended to provide the sole basis of any evaluation of the financial instruments discussed herein or the treatment thereof. Information and opinions contained herein are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. BNP Paribas assumes no responsibility or liability for the Information contained herein and is not holding out any Information as a recommendation to take (or refrain from taking) any action in respect of any financial instrument. You must consult your own advisers prior to making any decision in respect of such Information. 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Changes to assumptions may have a material impact on any recommendations made herein. This document is confidential and is being submitted to selected recipients only. It may not be reproduced (in whole or in part) to any other person without the prior written permission of BNL BNL-Gruppo BNP Paribas. All rights reserved. BNP Paribas (2011). All rights reserved. 18